HCMC proposes ministries to assess capital adjustment for metro projects

SGGP

Chairman of HCMC People’s Committee Nguyen Thanh Phong has sent an urgent dispatch to the Ministry of Finance, the Ministry of Planning and Investment on capital adjustment for the first and second metro lines, Ben Thanh-Suoi Tien and Ben Thanh-Tham Luong, announced the committee’s office yesterday afternoon.


Ben Thanh-Suoi Tien metro line in Binh Thanh district (Photo: SGGP)

Ben Thanh-Suoi Tien metro line in Binh Thanh district (Photo: SGGP)

According to the dispatch, implementing direction by the Ministry of Planning and Investment the city People’s Committee, Investor Urban Railway Management Board and relevant agencies have completed a number of works.

Specifically, they have established an appraisal council for the two metro line projects’ adjustment and organized adjustment assessment according to the law. In addition, they have completed estimation over the projects’ implementation, internal appraisal over the projects’ adjustment including capital source and capital balance ability after adjustment. These have been sent to the Ministry of Planning and Investment and the Ministry of Finance for considering and giving opinions before the city completes the capital adjustment report to submit to competent authorities to decide in accordance with instructions by the Politburo, the Government and the applicable law.

According to plan, procedures and documents on the projects’ adjustment must be completed before October 31 this year to submit to the city People’s Council before the yearend session. Still, the city has not received respond from the Ministry of Planning and Investment and the Ministry of Finance yet.

If procedures on assessment and approval of the project adjustment continues prolonging, it will seriously affect the projects’ implementation progress and result in some consequences. For instance, it will negatively affect the diplomatic relationship between Vietnam and nations financing the projects and the financing for investment project in general and metro projects in particular in the future. Domestic and overseas public opinions will have not good estimation about management role in the implementation of metro projects using foreign loans. Moreover, it will seriously impact the implementation plan and progress of the projects.

In particular, the first metro line is in the phase of gathering all resources to make sure the progress and open to traffic in the fourth quarter, 2021. If the adjustment procedure approval is not done in November, the lateness in payment to contractors might result in stop or construction extension and event lawsuits by foreign contractors. Currently, 67 percent of the first metro line’s construction work has been done.

In the meantime, the second metro line is in the phase of auction to choose contractors in parallel with project adjustment. If the adjustment procedure approval is not done in November, bidding and loan disbursement plans will be unable to complete before December 2020 and that might cause loan agreements no longer valid. As a result the project will lose capital and come to a standstill.

Therefore, the city People’s Committee proposed the Minister of Planning and Investment to chair a meeting with the Minister of Finance, the committee chairman together with representatives from relevant agencies from October 7-11 to listen to and solve difficulties in capital source assessment and capital balance ability after adjustment.

By Quoc Hung – Translated by Ngoc Thanh

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